Editor’s note: Shamistha Selvaratnam is a LLM Candidate of the Advanced Masters of European and International Human Rights Law at Leiden University in the Netherlands. Prior to commencing the LLM, she worked as a business and human rights solicitor in Australia where she specialised in promoting business respect for human rights through engagement with policy, law and practice.

Human rights due diligence (HRDD) has emerged as a dominant paradigm for doing business with respect for human rights. It is a central concept to the UNGPs and describes what ‘steps a company must take to become aware of, prevent and address adverse human rights impacts’ in order to discharge the responsibility to respect.[1] The case studies examining Adidas’ and Unilever’s HRDD practices (the Case Studies) have demonstrated how businesses are working with the concept of HRDD and translating it into practice. They provide an opportunity to consider the adaptable nature of HRDD and whether it has the potential to transform business internal frameworks in order to generate greater corporate respect for human rights. This will be reflected on in this final blog of our series of articles dedicated to HRDD. It will also reflect on the role that hard law initiatives play in incentivising substantive human rights compliance by business (in addition to soft law initiatives such as the UNGPs).

The Adaptable Nature of HRDD

There is no ‘one-size-fits-all’ approach that can be taken by businesses when implementing HRDD. Although the elements and parameters of HRDD are defined in the UNGPs (discussed in detail in a previous blog in this series), it is, by its very nature, an open-ended concept that has been ‘articulated at a certain level of abstraction’. Indeed, this level of abstraction was arguably intentional given the use of the term ‘due’ in HRDD, which ‘implies variation of effort and resources necessary to address effectively adverse impacts in a particular context’.[2]

The flexibility built into the concept of HRDD acknowledges that there are more than ‘80,000 multinational corporations, ten times as many subsidiaries and countless national firms’ globally that differ in many respects.[3] Accordingly, the shape of HRDD within one business cannot be the same as that of another business – it should be ‘determined by the context in which a company is operating, its activities, and the relationships associated with those activities’.[4] As Ruggie acknowledged in 2010, his aim was to ‘provide companies with universally applicable guiding principles for … conducting due diligence’, rather than prescriptive guidance. Therefore, the ‘complexity of tools and the magnitude of processes’ employed by businesses will vary depending on the circumstances. As such, businesses can exercise a great deal of discretion as to how to translate HRDD into practice.

However, this adaptable nature of HRDD has been critiqued for lacking clarity, embodying a ‘high degree of fragility and flexibility’ and for containing an ‘inbuilt looseness’.[5] These complexities arise due to the absence of ‘sufficient specificity of expected action’.[6] Bijlmakers argues that the ‘ambiguity and openness’ of HRDD can ‘lead to uncertainty about what conduct is required from companies for the effective implementation of their responsibilities’.[7] This can result in a lack of compliance by businesses or differing levels of compliance, which ultimately means that HRDD ‘may or may not achieve the desired outcome – i.e. non-violation of human rights – in all cases’.[8] Indeed from the Case Studies it is clear that despite the extensive efforts made by Adidas and Unilever to put HRDD into practice, there are still gaps between the paper-based processes and practices of both businesses, e.g. there are human rights abuses present within their supply chains that are not being identified by their current HRDD practices and therefore not being addressed. Mares also argues that the looseness surrounding HRDD as a concept can also result in ineffective implementation, whereby businesses take action that is ‘largely symbolic, generates limited improvements, and fails to address underlying issues’.[9] As a result, businesses are not addressing the root causes of human rights issues within their business, but rather ‘applying bandaids to symptoms’. [10]

The flexibility of HRDD as a concept also allows businesses to employ various tools and processes in order to ‘create plausible deniability’, instead of discovering and understanding issues within their supply chains and how they should be managed.[11] Through conducting on the ground research at the local level, Bartley demonstrates that businesses appear to be using these tools and processes in order to ‘collect just enough information to produce assurances of due diligence’, allowing human rights issues and impacts to be kept out of sight.[12] Accordingly, their is a risk that businesses take advantage of the open-ended nature of HRDD by implementing HRDD processes as window-dressing to give the impression that they are engaging with the human rights risks and impacts in the context of their business, when in fact they are not.

However, despite these critiques the Case Studies demonstrate that the adaptable nature of HRDD has proven to be transformative on businesses. Embracing HRDD has led Adidas and Unilever to transform their operations to fit the different phases of the HRDD process. In doing so, they have avoided using a cookie-cutter approach that does not account for the differences between the businesses and they way they operate.

The use of customised HRDD approaches is of particular importance given that the salient human rights risks and impacts identified by a business will always differ in some respects to those of another business. With respect to Adidas and Unilever, despite having some overlapping identified risks (e.g. discrimination, working hours, freedom of association and fair wages), both businesses also focus on a number of specific salient risks, which are determined using various factors including the assessed risks of the countries in which they operate. On one hand, land rights are a particular focus for Unilever given the negative impacts it can have on individual’s and communities’ land tenure rights, particularly through its suppliers. On the other hand, child labour is more of a salient risk for Adidas given the pressure on brands in the apparel sector to produce garments at low costs in a quick time frame. In light of this, the HRDD processes followed by each business after identifying these risk areas are different such that the actions taken to integrate and address risks and impacts are directly responsive to those risks.

Is HRDD Effective to Foster Corporate Respect of Human Rights? 

The Case Studies also demonstrate that HRDD is not solely a paper tiger. Businesses that truly engage with the HRDD process can indeed transform internal processes, enhancing corporate attention on human rights. Both Adidas and Unilever have not sought to use HRDD as a buzzword with no institutional consequences. Instead they have introduced concrete mechanisms aimed at preventing human rights impacts from arising within their business context. 

So how has HRDD had a transformative impact on Adidas and Unilever? As I have shown in the Case Studies, it has provided a framework for embedding institutional and regulatory changes geared towards the prevention of adverse human rights impacts. On paper, they have translated the cycle of HRDD into a maze of internal procedures involving different stages of their activities as well as different corporate entities integrated in their supply chains. Moreover, they have built-up enforcement mechanisms in an attempt to trigger change if a potential human rights risk is identified. In short, the transformative impact of HRDD on the structure and operations of the two corporations is clear, whether this impact is effective to tackle human rights violations in their supply chains is another matter. The Case Studies conducted cannot evidence effectiveness, as it would require much more time-consuming and expensive on-field studies to observe whether the compliance of, for example, the working conditions of Adidas’ or Unilever’s suppliers with core labour rights improves thanks to these changes.    

It is certain that neither Adidas nor Unilever have a perfect HRDD process in place – gaps and blindspots will always exist which allow serious human rights issues to continue to emerge in their supply chains. Nonetheless, as evidenced above, it is also true that embracing HRDD had a transformative impact in the way these businesses operate. Whether these transformations are correlated with a decrease in human rights violations across their supply chains is a fundamental question that cannot be answered by my research, even though it will be at the centre of future assessments of the practical effects of HRDD on human rights throughout supply chains.    

The Catalyst Role of Hard Law Initiatives

Soft law HRDD initiatives such as the UNGPs and the OECD Guidelines have been primarily relied upon to date in order to regulate corporate human rights behaviour. Over the past years, however, several countries have either adopted or started to consider adopting legislation that embeds HRDD into their legal framework. For example:

• The UK and Australia have both adopted legislation requiring specific businesses to report on their HRDD processes and efforts in their operations and supply chains in relation to modern slavery.
• The Netherlands has adopted legislation that requires specific companies to undertake HRDD related to child labour in their supply chains.
• France has taken a broader approach, rather than focusing on thematic issues, and adopted legislation that requires certain businesses to undertake HRDD to identify and prevent serious violations of human rights and fundamental freedoms, health and safety as well as the environment.
• Further, the Human Rights Council’s Open-Ended Intergovernmental Working Group on Transnational Corporations and Other Business Enterprises with Respect to Human Rights is in the process of developing a binding business and human rights treaty. The current draft of the treaty includes a HRDD article requiring state parties to ensure that their domestic legislation requires all businesses to which the treaty applies to undertake HRDD throughout their business activities.[13]

The rapid rise of such hard law initiatives imposing HRDD across the board means that transformation observed in the context of Unilever and Adidas will spread to many more businesses in the coming years. The turn to binding HRDD might be a response to the lack of willingness of businesses to embrace HRDD voluntarily. This is particularly the case in light of the dire landscape highlighted by benchmarking initiatives. For example, the results of the Corporate Human Rights Benchmark demonstrates that 40% of the companies ranked scored no points at all in relation to the systems they have in place to ensure that due diligence processes are implemented.

Hard law that complements the business and human rights soft law already in existence might create the ‘compliance pull’ that is needed to ensure that businesses undertake HRDD by legally mandating that they engage in the process. Further, it can clarify and create greater certainty as to the expectations on business with respect to HRDD, as well as incentivise meaningful HRDD by imposing the risk of civil liability onto businesses failing to conduct proper HRDD. The turn to binding HRDD will necessarily have transformative effects on the way affected businesses operate. It will trigger the emergence of a whole HRDD bureaucracy involving rules, processes and institutions. Yet, whether it will lead to greater respect for human rights remains to be seen in practice and depends on the way HRDD will be implemented as well as on the intensity of control exercised by national authorities.

Conclusion

This blog series has delved into the operationalisation of HRDD from theory to practice by business. Through the detailed examination of the HRDD practices of Adidas and Unilever in their supply chains, it has demonstrated that HRDD can profoundly change the internal operations of businesses embracing it.

Despite the fragility and flexibility of the concept that gives rise to uncertainty and ambiguity as to how it should be complied with, businesses that choose to fully engage with the process are transformed by it with a potential effect on their human rights footprint. Truly implementing HRDD throughout a business’ operations and supply chains has the potential to result in human rights risks and impacts being better embedded within the business’ corporate governance framework. This is because HRDD focuses on identifying and managing these risks and impacts and to use those findings to inform business decisions, such as whether to engage in business activities in a particular country or whether to enter into contractual relations with a particular supplier. The development and adoption of hard law imposing HRDD complementing existing soft law initiatives contributes to the diffusion of HRDD into a greater number of businesses.

This blog series paves the way for further research into whether the HRDD mechanisms implemented by Adidas, Unilever and other businesses are truly effective to protect human rights. On the ground research at a local level involving engagement with the relevant business being assessed and its stakeholders is crucial to determining the effectiveness of specific HRDD mechanisms in practice. A broader examination of a greater number of businesses’ HRDD practices will allow for conclusions to be drawn as to how businesses can effectively conduct HRDD and whether there are particular practices and mechanisms that are more effective.

[1] Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, John Ruggie: Protect, Respect and Remedy: a Framework for Business and Human Rights (7 April 2008), UN Doc. A/HRC/8/5, [56] [2008 Report].

[2] Radu Mares, “Respect” Human Rights: Concept and Convergence, in R Bird, D Cahoy and J Darin (eds) Law, Business and Human Rights: Bridging the Gap, Edward Elgar Publishing (2014), p 8.

[3] John Ruggie, The Corporate Responsibility to Respect Human Rights (2010).

[4] 2008 Report, supra note 1, [25].

[5] Justine Nolan, The Corporate Responsibility to Respect Human Rights: Soft Law of Not Law?, in S Deva and D Bilchitz (eds), Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect? (2013), p 140 [Nolan]; Radu Mares, Human Rights Due Diligence and the Root Causes of Harm in Business Operations: A Textual and Contextual Analysis of the Guiding Principles on Business and Human Rights, 10(1) Northeastern University Law Review 1 (2018), p 45 [Mares].

[6] Mares, ibid, p 6.

[7] Stephanie Bijlmakers, Corporate Social Responsibility, Human Rights, and the Law, London: Routledge (2018), p 120.

[8] Ibid; Surya Deva, Treating Human Rights Lightly: A Critique of the Consensus Rhetoric and the Language Employed by the Guiding Principles, in S Deva and D Bilchitz (eds) Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect?, Cambridge University Press (2013), p 101.

[9] Mares, supra note 5, p 45.

[10] Ibid, p 1.

[11] Tim Bartley, Rules without Rights: Land, Labor, and Private Authority in the Global Economy, Oxford University Press (2018), p 178.

[12] Ibid.

[13] The HRDD article of the treaty is discussed in further detail in a previous blog.

This event co-organised with FIDH and SOMO aims to provide a detailed overview of the latest developments in the field of BHR regulation. The first part of the afternoon will be dedicated to a comparative review of some national developments in BHR regulation. The speakers have been asked to focus their presentations (max 10 minutes) on outlining the recent (and sometimes future) changes in the various regulatory models introduced by specific European states. They will also discuss the (expected) effects of the different regulatory models based on comparative analyses and empirical data gathered so far.

The second part of the afternoon will then focus on discussing the latest draft of the proposed binding treaty on BHR. The speakers have been asked to prepare short presentations (max 10 minutes) on the strengths and weaknesses of the current draft (with an eye on the changes introduced with regard to the Zero draft). The presentations will be followed by open exchanges with the participants on the various points raised (including concrete proposals for improvement).

Where: Asser Institute in The Hague

When: 14 November from 13:00

Draft programme: 

13:00 – 13:15 Welcome

13:15 – 15:00 - BHR regulation: Recent Developments in Europe – Chair Maddalena Neglia (FIDH)

• Nadia Bernaz (Wageningen University) – Recent developments in the UK
• Anna Beckers (Maastricht University) – Recent developments in Germany
• Antoine Duval (Asser Institute) – Recent developments in France
• Lucas Roorda (Utrecht University/College voor de Rechten van de Mens) – Recent developments in the Netherlands
• Irene Pietropaoli (British Institute of International and Comparative Law) – Recent developments in BHR regulation: A comparative perspective

15:00 – 15:15 Coffee Break 

15:15 – 17:00 – Revised Draft of the Binding BHR Treaty: Strengths and weaknesses – Chair Mariëtte van Huijstee (SOMO)

• Nadia Bernaz (Wageningen University)
• Anna Beckers (Maastricht University)
• Antoine Duval (Asser Institute)
• Irene Pietropaoli (British Institute of International and Comparative Law)
• Lucas Roorda (Utrecht University/ College voor de Rechten van de Mens)

17:00 -  Closing Reception.

This event is organised with the support of:

The headline of the New York Times on 24 April summed it up: ‘Supreme Court Bars Human Rights Suits Against Foreign Corporations’. The Jesner decision, released earlier that day by the U.S. Supreme Court, triggered a tremor of indignation in the human rights movement given the immunity it conferred to foreign corporations violating human rights against suits under the Alien Tort Statute, and led to a flood of legal and academic commentaries online. This panel discussion, organised with the support of the Netherlands Network of Human Rights Research, will address various aspects of the judgment. Its aim is to better understand the road travelled by American courts leading up to the decision with regard to the application of the Alien Tort Statute to corporations, to compare the decision with the position taken in other jurisdictions, and to discuss the ruling's potential broader impact on the direction taken by the business and human rights movement.

Where: T.M.C. Asser Instituut in The Hague

When: Thursday 24 May at 2:30 pm

Speakers:

• Phillip Paiement (Tilburg University) - The Jesner case and the ATS: An American perspective

• Lucas Roorda (Utrecht University) - A comparative perspective on Jesner and corporate liability for human rights violations

• Nadia Bernaz (Wageningen University) - Lessons for the business and human rights movement after Jesner

• Antoine Duval (Asser Institute) - Moderator

Register here!

Editor’s note: Constance Kwant is an experienced international lawyer who has worked as in-house senior legal counsel for a top tier international financial institution in both Hong Kong and the Netherlands. She has a specific interest in sustainable business and human rights, including responsible finance.

Introduction

This post aims to outline, briefly analyse and to provide a critical comment in relation to striking a balance between confidentiality and transparency in the procedure followed by the Dutch National Contact Point (‘NCP’) in the Specific instance procedure filed in December 2015 by three former employees (‘Representatives’) on behalf of a group of 168 former employees of Heineken’s subsidiary Bralima SA (‘Bralima’) in Bakavu, located in the eastern part of the Democratic Republic of Congo (‘DRC’).

The case, finalised in August 2017, concerns alleged violations of labour and human rights by Bralima in the period 1999-2003, a period during which the DRC was a highly volatile and conflict-affected country, where the eastern part of the DRC was effectively under control of rebel movement DRC-Goma.The complaint also alleged that Bralima had cooperated with DRC-Goma in a number of ways throughout this period. On the basis of the alleged violations, the Representatives sought financial compensation by filing its notification with the NCP.

Since the allegations were brought forward to the NCP under the OECD Guidelines for Multinational Enterprises, this post will first provide short background information on the OECD Guidelines and the workings of the Dutch NCP, subsequently moving through the proceedings, its outcome, and a brief analysis with a critical note.

The OECD Guidelines for Multinational Enterprises

The Organisation for Economic Co-operation and Development (‘OECD’) finds its roots in the Organisation for European Economic Cooperation (‘OEEC)’, which was established in 1948 to run the US-financed Marshall Plan for the economic reconstruction of the European continent after World War II. Due to the recognition by governments of the interdependence of their economies and OEEC’s success, Canada and the US joined the 18 OEEC member countries by signing the new OECD Convention on 14 December 1960. The OECD was formally established on 30 September 1961, when the Convention entered into force. To date, the OECD has 35 member countries and a number of adhering non-member countries.[1]

The OECD Guidelines for Multinational Enterprises were originally adopted in 1976 as part of the Declaration on International Investment and Multinational Enterprises (‘Guidelines’). These Guidelines are recommendations addressed by governments to multinational enterprises operating in or from adhering countries and provide voluntary principles and standards for responsible business conduct. They are the only multilaterally endorsed and comprehensive code that governments are committed to promoting. Various reviews since then have taken place, in 1979,1982, 1984,1991, 2000 with the most recent update in 2011. The revision of the year 2000 Guidelines provided for further clarification of the roles and responsibilities of the National Contact Points (‘NCPs’) by the incorporation of a section relating to the Procedural Guidance on implementation procedures. [2] Since then, the Guidelines constitute the only international instrument regulating transnational corporations with a built-in grievance mechanism as it provides a mediation and conciliation platform for resolving issues that arise from alleged non-observance of the Guidelines through the NCPs. The most recent update in 2011 not only provides a reinforced procedural guidance to strengthen the role of the NCPs and improve their performance, it also contains an entirely new Chapter on Human Rights in line with the Ruggie Principles.[3]

The National Contact Point of The Netherlands

The Dutch National Contact Point was established in 2000 as an independent entity, responsible for its own procedures and decision making. Its functioning falls under the political responsibility of the Minister for Foreign Trade and Development Cooperation and its Secretariat is hosted by the Ministry of Foreign Affairs. Since its restructuring in 2007, the NCP consists of four independent members and four advisory members, the latter from the Ministries of respectively Social Affairs and Employment, of Economic Affairs, of Foreign Affairs and of Infrastructure and Environment.

The NCP has two core tasks: (i) raising awareness of the Guidelines with businesses, trade unions and non-governmental organisations (‘NGOs’); and (ii) contributing to the resolution of issues that arise from the alleged non-observance of the Guidelines in specific instances. It states “The NCP can assist the involved parties to find a solution in order to avoid further escalation or reputational damage”. This can be done in an informal process, or it may be through a formal notification of a specific instance. [4] Each specific instance procedure with the NCP follows a standard procedure including a confidentiality policy applicable to both the NCP and the parties involved.

The Bralima and Heineken case: specific instance procedure with the Dutch NCP

Background of the case

On 14 December 2015, the NCP received a notification of specific instance in relation to alleged violations of the 2000 Guidelines by Bralima SA (‘Bralima’), Bakavu, Democratic Republic of Congo and its ultimate parent company Heineken N.V. (‘Heineken’), based in Amsterdam, the Netherlands. The notification was filed by three former employees of Heineken’s subsidiary on behalf of a group of 168 former employees who had been made redundant in several rounds in the period 1999-2003.

In its Initial Assessment on the notification regarding the former employees of Bralima versus Bralima and Heineken of 28 June 2016, the NCP summarises the alleged violations under the Guidelines (version 2000) as follows:

• Violations of the human rights of their own workers in the Bralima company in Bakavu, RDC in the period 1999-2003
• Cooperation with the rebel movement of RCD-Goma from 2000-2003 in RDC and the consequences for the workers of Bralima at Bakavu, RDC and their families”
• Illegitimate dismissals of 168 employees of Bralima, Bakavu, RDC between 1999-2003
• Irregularities and deliberate omissions in the individual redundancy schemes of the dismissed worker 
• Serious errors concerning mass dismissals in the period 1999-2003 contrary to the Congolese law by Bralima
• Taking the above into account Bralima and Heineken should pay two hundred million (200.000.000) euros to the former employees and their families as a compensation for the damages

In relation to the alleged violations of the Guidelines, it is argued that in particular the following Chapters of the Guidelines were violated: Chapter I. (Concept and Principles), Chapter II. (General Policies, paragraphs 1, 2, 5, 6, 9, 10, 11), Chapter IV. (Employment and Industrial Relations, paragraph 6) and Chapter VI. (Combating Bribery, paragraph 6). [5]

The NCP Procedure from receipt of the notification until the Initial Assessment

The NCP acknowledged receipt of the notification on 18 December 2015 and informed Heineken. The following steps were subsequently taken:

1. 21 January 2016: the NCP spoke with the Representatives by phone, further communication (questions and answers) took place via email;
2. 10 February 2016: the NCP had a meeting with Heineken during which Heineken asked for and was granted two weeks to determine its position;
3. 10 February 2016: the NCP received an initial response from Heineken on the notification that its Code of Business Conduct and its underlying policies (including on Employees and Human Rights, Bribery and Improper Advantages and the Supplier Code) and other instruments apply to all companies within the Heineken Group, including Bralima, in more than 70 countries in which the companies of the Heineken Group operate; that Heineken indirectly holds 95% of the shares in Bralima; and Bralima stayed in the DRC because the business case continued to be valid.
4. End of February 2016: the NCP supported Heineken’s proposal to first have the Representatives hold a meeting with the management of Bralima without interference of the NCP;
5. 13 April 2016: the meeting was held in Bakavu, DRC. Both parties informed the NCP that the meeting had not divulged anything new;
6. 31 May 2016: draft version of NCP’s initial assessment was sent to the parties with the request to submit any comments within two weeks;
7. 28 June 2016: the NCP published its initial assessment on its website.

The Initial Assessment of the specific instance by the NCP

Since the DRC is not a member of the OECD, it has no National Contact Point. According to the NCP’s notification policy, in such case, a notice of specific instance can be submitted to the NCP where the multinational enterprise involved is seated.

The NCP, based on this, considered itself competent to offer its good offices and to initiate a dialogue since Heineken is based in Amsterdam. Both parties accepted NCP’s good offices and requested the appointment of a third-party mediator. Also, an expert in Congolese law was appointed. According to the Initial Assessment, Heineken stated that it “is of the opinion that there is no breach of the OECD Guidelines, […..] concerning the dismissals in the period 1999-2003 the existing procedures have been followed carefully,[…..] it has always been of the opinion that it was a case for Bralima, but it did follow the case, […..]  the specific instance procedure is a forward looking process in which the NCP may try to verify the facts and organise interaction between the parties aimed at addressing the issues raised”.[6] The NCP concluded that in accordance with the Guidelines (2000), and its own Specific Instance Procedure, the notification merited further examination. Thereafter, parties entered into agreements on confidentiality and transparency on mediation and further examination while in the process, in accordance with the NCP's procedure.[7]

In the course of the procedure after the publication of the NCP’s Initial Assessment of 28 June 2016, several meetings were held in the period up to 18 July 2017. In January 2017, the parties agreed to the framework surrounding the dialogue. To further facilitate the dialogue and mediation process, shortly thereafter, meetings were also held at the Dutch embassies in respectively Kampala, Uganda, and Paris, France. These meetings were monitored by the NCP. In Kampala, the meeting between parties took place with the mediator, in Paris, with the externally appointed expert in Congolese labour law.^[8]

To further facilitate the dialogue and mediation process, shortly thereafter, meetings were also held at the Dutch embassies in respectively Kampala, Uganda, and Paris, France. These meetings were monitored by the NCP. In Kampala, the meeting between parties took place with the mediator, in Paris, with the externally appointed expert in Congolese labour law.^[9]

The NCP’s Final Statement and the scope of application of the Guidelines

According to the NCP’s Final Statement on the notification in Former employees Bralima vs Bralima and Heineken of 18 August 2017, the Guidelines (2000) equally apply to Heineken, not just Bralima, on the basis of Chapter II. General Policies, paragraph 1 of the Guidelines (2000).[10]

In this context, the NCP noted: “the Guidelines (2000) do not mention enterprise groups”. Based on Chapter II. paragraph 1 however, it concluded that the Guidelines do apply because Heineken held (and still holds) indirectly 95% of the shares in Bralima, implying a very strong business relationship.

The NCP’s recommendations

In general terms, the NCP encourages Heineken to draw up a policy, including guidelines as to how Heineken is to conduct business and operate in volatile and conflict-affected areas. In addition, according to the NCP, the specific instance procedure highlights the need to ensure ongoing internal analysis of Heineken's existing policies and processes not only in the context of the Guidelines (2011) but also in relation to the UN Guiding Principles on Business and Human Rights (‘Ruggie Principles’).

The specific Recommendations adopted by the NCP relate to Chapter IV. (Employment and Industrial Relations), paragraph 3 of the Guidelines (2000) and state that Heineken is to “provide information to employees and their representatives which enables them to obtain a true and fair view of the performance of the entity or, where appropriate, the enterprise as a whole”. [11] Moreover, based on this and on Chapter IV. (Employment and Industrial Relations), paragraph 6 of the Guidelines (2000) the NCP recommends:

1. transparency and communication to employees be part of enterprises’ policies for dealing with conflict settings; and
2. the handling of complaints should be monitored and evaluated within company groups as part of applying corporate governance principles and practices throughout the group.[12]

Subsequently, the NCP concluded on the basis of its monitoring role that “all parties have participated in a proper and fair way”.[13] In addition, it stressed the useful support of an external third party mediator, the involvement of an external expert on Congolese law and the Dutch embassies in Kampala and Paris having facilitated meetings outside the DRC. [14] The parties accepted the offer from the NCP to conduct a dialogue on the implementation of its recommendations, scheduled for the summer of 2018.[15] However, the final statement indicates also that both parties wanted to keep confidentiality on the agreement/outcome and “the NCP regrets this”.^[16]

Comments: Transparency matters

The NCP has been transparent in publishing the procedural steps it has taken in both its Initial Assessment and its Final Statement. Nevertheless, we face a total lack of transparency on what was finally agreed upon between the former employees of Bralima and Heineken. This is in itself a missed opportunity to provide a learning curve for the Investment Committee of the OECD, governments, multinational enterprises and civil society. This lack of transparency regarding the actual outcome of the Bralima and Heineken procedure leads to uncertainty on what agreements have or have not been reached and seems to severely contradict the spirit and possibly even undermine the effectiveness of the OECD Guidelines.

In order to ensure that all NCPs operate in a comparable way, the Guidelines (2000) incorporated the concept of “functional equivalence” in the Procedural Guidance for NCPs, meaning that in order to achieve comparable functioning, the Guidelines provide for so-called Core Criteria for NCPs which relate to Visibility, Accessibility,Transparency and Accountability, based on which the NCP accordingly established its own Core Values.

However, as far as the Core criterion Transparency is concerned, the Guidelines state that “outcomes will be transparent unless preserving confidentiality is in the best interests of effective implementation of the Guidelines”.[17] It is remarkable that the NCP itself regretted that both parties wanted to keep confidentiality on the outcome of the mediation, while not motivating its decision to ‘allow’ for confidentiality in the outcome of this case. It seems that the actual settlement of the dispute prevailed over ‘Transparency’ as one of the key Core Values under the OECD Guidelines. Did the “effective implementation” of the Guidelines with regards to Heineken truly require this lack of transparency regarding the final settlement? Or, isn’t it rather otherwise, that the effective implementation of the Guidelines, viewed from a general point of view, requires transparency as a default solution, with limited and strict exceptions that need to be properly justified?

[1] See http://www.oecd.org/about/membersandpartners/. In addition, the Supplementary Protocol No.1 to the OECD Convention the signatories to the Convention agreed that the European Commission participates in the work of the OECD. The European Commission however does not have the right to vote and does not officially take part in the adoption of legal instruments, http://www.oecd.org/general/supplementaryprotocolno1totheconventionontheoecd.htm.

[2] See http://www.oecd.org/corporate/mne/1922428.pdf, at page 33-35.

[3] On 16 June 2011, the United Nations Human Rights Council unanimously endorsed the Guiding Principles for Business and Human Rights: ‘Implementing the United Nations “Protect, Respect and Remedy” Framework’, which seek to provide a global standard for all businesses in preventing and addressing the risk of adverse human rights impact linked to business activity.

[4] On specific instances, see https://www.oecdguidelines.nl/notifications/submitting-a-specific-instance.

[5] See the NCP’s Initial Assessment, 28 June 2016, at page 2-3.

[6] Ibid, at page 4.

[7] Ibid, at page 5.

[8] See NCP, Final Statement, 18 August 2017, at page 4.

[9] Ibid.

[10] This provision states: “…..[…..] Enterprises should…[…] ‘Encourage, where practicable, business partners, including suppliers and sub-contractors, to apply principles of corporate conduct compatible with the Guidelines’”.

[11] See the 2000 OECD Guidelines for Multinational Enterprises, at page 17.

[12] Heineken does have a Speak Up Policy as part of its Code of Business Framework, see https://secure.ethicspoint.com/domain/media/en/gui/25903/index.html.

[13] See NCP, Final Statement, 18 August 2017, at page 6, paragraph 10.

[14] Ibid, paragraphs 13-14.

[15] Ibid, at page 7.

[16] Ibid, at page 5, paragraph 5.

[17] Ibid, at page 57, paragraph 2.